State must monitor effectiveness of tax breaks

Legislative update

By Rep. Al Williams
Special to the Courier

POSTED:February 3, 2010 2:19 p.m.

In addition to the national recession, another contributing factor in Georgia’s state budget deficit is the hundreds of millions of dollars foregone through a number of special-interest tax cuts and exemptions implemented over the past several years. On Jan. 25, a House subcommittee moved forward with legislation to evaluate those tax breaks’ impact on the budget and their success in achieving their intended goals.SB 206, which was approved by the Senate last year, would require the state Office of Planning and Budget to review the tax cuts, credits and exemptions to help determine whether they should be repealed. Many of them were adopted for job creation, but no studies have been published or made available to lawmakers as to their effectiveness. SB 206 now goes to the House Appropriations Committee for consideration.While that legislation moved forward, another package of proposed business tax breaks is to be introduced in the House this week. The provisions of HB 1023 and HB 1024 would purportedly spur the creation of startup businesses and, in turn, generate jobs. The legislation proposes waiving state business fees for starting a business, income tax credits, unemployment insurance tax credits, elimination of the net worth or intangible tax, a 50 percent reduction in the capital gains tax and a phase-out of the sales tax deposit required of small businesses. Similar legislation, HB 481, was adopted in 2009 but was vetoed by Gov. Sonny Perdue because of its estimated $1.2 billion hit on the budget. As legislators, we need to seek ways to help citizens who are suffering in this economy, including Georgians who have lost their jobs, their homes to foreclosure or their health-care coverage, instead of providing more tax breaks for special interests.House rule changes: A series of rule changes in the House, proposed by new Speaker David Ralston, earned unanimous approval Jan. 28. HR 1168 eliminates the infamous “hawk” system, giving certain Republican legislators the power to vote on any committee and change the outcome of legislation at the whim of the previous speaker. The new rules also reduce the power of the Rules Committee to rewrite legislation.Legislators furloughed: Due to the state’s budget crisis, our educators and other employees have had to take unpaid furlough days. On Jan. 26, a plan was announced for members of the General Assembly to take additional furlough days, which would save the state an estimated $2.7 million. I support this plan because as elected officials we must lead by example. We are not and should not be excused from giving up part of our legislative salaries to help in the very difficult task of balancing this year’s budget. By the end of fiscal year 2010, lawmakers will have taken 11 unpaid furlough days, including one day a month from August through December last year. Other state agencies have each taken between three and 12 furlough days.

Williams represents the 165th District (Liberty County) in the Georgia House of Representatives. Call him at (404) 656-6372 or e-mail al.williams@house.ga.gov.